AltaVista Latest To Carry GoTo Paid Listings

AltaVista is supposed to begin carrying paid links provided by GoTo.com today on its main site, making it the latest major search engine to be co-opted by the paid placement service.

GoTo currently has paid links appearing live at Netscape Search and AOL Search, and they should appear at Lycos and HotBot within the next two weeks, GoTo says.

Three GoTo paid links are to appear in a "Sponsored Listings" section that will appear at the bottom of AltaVista's search results page. In addition, AltaVista will also carry five links "above the fold" or at the very top of the branded listings it provides to those using its free internet access service, reaching the site through the Compaq keyboard link and other means.

The deal firmly establishes GoTo as a premier provider of paid listings to major search engines. It has also made the ability for site owners to "buy their way to the top" widely possible for the first time in the search engine market.

At the beginning of this year, none of the top ten most popular search engines had any type of paid placement program. Now, four of them do (AOL Search, AltaVista, Lycos, Netscape Search). The remaining six (Excite, Go, iWon, MSN Search, NBCi, Yahoo), still do not, but that's likely to change. (NBCi does carry paid listings, but not as prominently as the four previously named).

The numbers are even more dramatic when you go to the top fifteen search engines. Of these, 60 percent have a prominent paid links program. GoTo powers six of the programs, while the three others run their own. If metacrawlers were included, GoTo would have an even bigger presence.

I've written before about GoTo's changing distribution strategy, but it bears repeating for those bidding at the service. GoTo's goal is no longer to drive traffic to its own site. Rather, they are well along a path of distributing their links to others. This means that to get the most traffic, you'll really need to focus on being among GoTo's top bidders. While GoTo presents 40 results per page, its partners pick up much less. That means being in the top 40 isn't enough, especially as the traffic to GoTo.com itself will begin to drop over time. Instead, you'll need to be much higher up. Here's an at-a-glance guide where your listing will be carried, based on bid position:

In other words, if you are one of the top two bidders for a particular word, you'll have the widest distribution. Drop to position three, and suddenly your link won't appear on Netscape Search for that word, since it carries only two GoTo links. Drop to positions five through 10, and it's pretty much only the major metacrawlers will carry your link.

There are some exceptions. HotBot and Lycos aren't live, of course. When links do go live there, three are to be displayed above the fold, then additional ones may be integrated into the regular results. For example, HotBot will apparently use the number four bid as its number 10 result (and presumably, won't label this as a paid link, but we'll see).

NBCi is also experimenting with GoTo links as "Search Marketplace" listings that appear after NBCi's own editor-approved directory, user-submitted LiveDirectory and Inktomi crawler-based listings. GoTo links are also being rotated in more prominent spots at NBCi, while the service tests them.

GoTo links are also supposed to be rotated in various spots around AltaVista, in addition to their above the fold placement. GoTo results also appear in the metasearch listings at the bottom of Ask Jeeves result pages.

Finally, some partners such as CompuServe simply use GoTo's results as their primary listings, rather than supplementary ones. There are also many smaller sites that carry GoTo listings. So, even if you aren't in the top 10 spots, you'll still get some traffic -- just not as much as you could if presented prominently on the most important services.

As a consequence to the higher traffic GoTo is now generating, some of its advertisers are seeking out more targeted terms, so that they can affordably be distributed across the network. After all, with increased competition to be in the very top spots, bids for particular words can easily exceed a few dollars. Fortunately, GoTo says that its search term suggestion tool available to advertisers does collect queries from across its network. In other words, when you use it, you are seeing what terms are most popular not just at GoTo, but also at Netscape Search, AOL Search and its other partners, mixed in. That should help you have more faith that unusual terms aren't just oddities that rise to the top because of GoTo.com's own relatively low traffic.

The major search engine deals announced are just for the US. However, you might see GoTo paid links appear at its partners non-US editions, in the future.

"We are in discussions with our affiliates about extending our relationship with them in the UK. We're also planning to expand internationally, and we'd expect many if not all our partners would want to work with us in other countries," said GoTo's executive vice president Harry Chandler.

When the AOL deal was announced, GoTo valued it as a $50 million multiyear agreement. No amounts were given for the recent deal with Lycos, but Chandler described it as "not dissimilar" in size to AOL and the AltaVista deal simply as "significant" in terms of expected revenues generated for both parties. The ability for search engines to maximize revenue from the search pages without having to create a paid listing system from scratch is a key part of GoTo's continuing success.

"When search companies look at their revenue per page, which is a key metric, and they look at adding GoTo results, the nature of the amounts is attractive," Chandler said.

It's also the reason GoTo is expecting to land some additional major players in the future.

"The top search engines are one by one coming to the conclusion that this is a good idea," Chandler said. "We expect more, and a number of conversations are occurring."

I haven't updated the page with the partner data yet, but the basics of bidding are there. Also, links to the recent articles about other GoTo partnerships, GoTo's UK launch and its change in distribution strategy are right at the top of the page.